Easing investor procedures must be a top priority

Unsettled incompatibility between the provisions of the Investment Law and other regulations continues to impede investors in the legal setup stage.

Unsettled incompatibility between the provisions of the Investment Law and other regulations continues to impede investors in the legal setup stage.

According to the Ministry of Planning and Investment (MPI)'s Working Group on implementing the 2014 Law on Enterprises and Law on Investment, a consensus has been reached on whether impact assessment will be guided by the regulations outlined in the Law on Environmental Protection or the 2014 Law on Investment.

Accordingly, investors will have to follow the provisions of the 2014 Law on Investment, meaning they are now only required to present a preliminary environmental impact assessment report and measures on environmental protection to receive an investment proposal or investment certificate.

This move significantly reduces the procedural barriers erected by the Law on Environmental Protection, which required an official approval of the report.

"We have been working in close tandem with the Ministry of Natural Resources and Environment in the past months to come to this accord," said Tran Hao Hung, head of the MPI's Legal Department.

This is but one of the several incompatibilities between the Law on Enterprises and the 2014 Law on Investment and other regulations that have been tackled. However, the list of incompatibilities on the Working Group's agenda remains fairly long, covering diverse fields, such as healthcare, education, and industry and trade.

In reality, foreign investors are particularly anxious to see an amendment to governmental Decree 23/2007/ND-CP regulating the trading of goods and other activities related to commodities trading by foreign invested businesses.

A satisfying closure would follow the spirit of governmental Resolution 59/2015/NQ-CP (Resolution 59) on the implementation of the Law on Enterprises and Law on Investment. This task was to be finalised before the end of December 2015, according to the legislature's agenda.

Following the provisions of Decree 23, business registration agencies must source comments from the Ministry of Industry and Trade (MoIT) and grant investment certificates allowing foreign investors to trade goods and pursue related activities only upon receiving written approval from the MoIT. The 2014 Law on Investment and governmental Decree 118/2015/ND-CP guiding the implementation of the Law on Investment, however, did not stipulate these requirements.

Localities have been confused in their enforcement efforts, leaving the lion's share of investor records stuck in limbo.

Similarly, regarding investors in the field of education, several provisions of governmental Decree 73/2012/ND-CP on foreign cooperation and investment in education have yet to be amended. This stalling stymies efforts to ease investment procedures following the spirit of Resolution 59, hampering authorised government agencies to process applications.

Although Clause 4 of the 2014 Law on Investment prescribes its primacy in a clash with other regulations in fields related to forbidden and conditional business activities, as well as investment processes and procedures, enforcement, however, is not so simple.

"My approach is that legal documents need to be enforced in a way that later and higher level documents shall supersede the former, lower-level ones. Only by doing so will investors and businesses feel the conveniences we have touted in the Law on Investment and the Law on Enterprises," said Nguyen Dinh Cung, head of the MPI's Central Institute for Economic Management and head of the Working Group's Secretariat.